Which sections of the C12 Group agreement outline the franchisee's fee obligations?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenue Recognition: A majority of the Company's revenues are derived from franchise fees. Franchise agreements generally require the franchisee to pay 1) an initial non-refundable territory fee of $25,000 per franchise unit, 2) a prepaid marketing deposit of $10,000, 3) a training and support fee of $10,000 to $12,500, which is refundable prior to the start of training, 4) continuing fees based upon a percentage of monthly member billings ranging from 12% to 30%, and 5) a new member registration fee ranging from $300-500. Franchise agreements are renewed annually with no additional charges.
Franchisee shall submit a monthly Area Chair Activity and Payment Report via the reporting system to Franchisor by the fifth (5th) business day of each month for the preceding month's activity.
Franchisee shall pay Franchisor a late fee of $100 each time this report is late.
Any unpaid Royalty Fees past-due greater than thirty (30) days will be subject to a monthly compounded interest rate of 1.5% or the maximum interest rate allowed by law.
In addition, if Franchisee requires a change to a monthly Area Chair Activity and Payment Report (not due to Franchisor's system error) after the fifth (5th) day of the following month, Franchisee must pay Franchisor a $99 fee to correct such error(s).
Franchisee shall pay Franchisor all fees due under this Agreement via ACH or check (or credit card with Franchisee paying the applicable transaction and processing fees), which must be received by Franchisor by the fifth (5th) day of the month.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 20–21)
What This Means (2025 FDD)
According to the 2025 C12 Group FDD, several sections outline the franchisee's fee obligations. Specifically, the financial statements note that franchise agreements generally require franchisees to pay several fees. These include an initial non-refundable territory fee of $25,000 per franchise unit, a prepaid marketing deposit of $10,000, and a training and support fee ranging from $10,000 to $12,500, which is refundable prior to the start of training.
Additionally, franchisees must pay continuing fees based on a percentage of monthly member billings, ranging from 12% to 30%. There is also a new member registration fee ranging from $300 to $500. The FDD states that franchise agreements are renewed annually without additional charges.
Item 22 of the C12 Group Franchise Agreement also mentions that franchisees must submit a monthly Area Chair Activity and Payment Report and pay all fees via ACH or check. Late report submissions incur a $100 fee, and corrections to the report after the fifth day of the following month (not due to system error) incur a $99 fee. Unpaid Royalty Fees past-due greater than thirty (30) days will be subject to a monthly compounded interest rate of 1.5% or the maximum interest rate allowed by law.